· 4 min read
Events suggest that the world's leaders are directing their attention more and more to defence. And who can be surprised? Since war broke out in Ukraine, the prospect of violent conflict has become a very real concern. For those of us living in the West, the world feels much more dangerous than it did 10 or 20 years ago. NATO's pledge to boost defence spending to 5 per cent of GDP last week was just the latest sign that defence – and not, say, addressing the climate crisis – is now the top priority.
But the truth is that these can’t be separated. The challenges we face – geopolitical unrest, climate change, cybercrime, to name just three – are interconnected. They belong to a single, organised whole that amounts to much more than the sum of its parts. The name for this is polycrisis. Ignoring it, or misunderstanding it, would be a mistake.
The term polycrisis was coined by a French philosopher and sociologist called Edgar Morin. What he perceived, during a period of significant geopolitical change following the end of the Cold War and the breakup of the Soviet bloc, was that the interconnectedness of crises meant that solutions in one area could often lead to unintended consequences in another. Like the arcade game Whack-a-Mole, knocking one problem on the head could simply spawn another, and sometimes that second ‘mole’ would be bigger and tougher than the first.
Now, in 2025, much of the world is grappling with economic stresses, geopolitical instability, environmental breakdown, technological disruption, crises of legitimacy, rising cybercrime, and other challenges. But were governments to tackle methane emissions by reducing livestock farming, they might raise the price of meat, widen the urban-rural divide, create food insecurity, and weaken trust in climate policy. If they wanted to secure rare-earth minerals for electric vehicles, solar panels and wind turbines, they would have to deal with fragile and autocratic states. If in response to geopolitical change they needed to strengthen their militaries, they would have to use more steel, cement and jet fuel, and expand weapons factories and supply chains, which would lead to a boom in emissions.
Immediately, we see why it no longer makes sense for private companies to look at problems in isolation. A ‘climate event’ is now an economic and political event. A ‘geopolitical event’ is a climate and economic event. And for insurers, this poses particular challenges. My world has historically thrived on predictability. We would model hazards, such as fires and floods, as bounded events, each with clear triggers, costs, and likelihoods of happening. Now, that approach doesn’t hold. The correlations between risks are rising, losses come in clusters, and the protection gap – the divide between the economic losses from a risk and the proportion of those losses covered by insurance – is widening.
The only coherent response, for insurers, is twofold. First, to look at the polycrisis as a single, complex threat and develop solutions with that in mind. You could say that a polycrisis requires a polysolution: not intelligence, datasets, geospatial insights, software, human expertise, or anything else, but the combination of those things. It’s a daunting task, developing a real-time awareness of such a complex and dynamic situation. But it can be done: the technology exists.
Secondly, to move from a respond-and-compensate model to a predict-and-prevent model. Given the way that disasters within the polycrisis can cause and amplify others, the wisest approach is to try to stop one happening in the first place. With enough foresight, a crisis can be averted or prepared for. A wildfire, for example, can be predicted with pinpoint accuracy, giving property owners the time to take preventative measures.
Almost as difficult as developing and integrating the technology required to make this change and grapple with the polycrisis is changing our mindsets. The polycrisis is a profoundly counterintuitive idea. Even at the personal level, some ideas tend to grab our attention and others don’t. Humans didn’t evolve to deal with something as complicated and abstract as the polycrisis. The temptation will always be to focus on one thing to the exclusion of others. Businesses and those that insure them now need to understand that an approach like this won’t suffice.
Traditionally, insurers have been tasked with ensuring the resilience of society. That has meant being there to pick up the pieces in the event of a disaster. It’s an important role: without it, people would be far less self-sufficient and less able to take risks. The focus of people, the media and governments will vary, but the polycrisis isn’t going away. Now, if insurers want to keep playing their traditional role, they have to evolve.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
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